PT Kioson Komersial Indonesia Tbk, an e-commerce firm, saw its shares surge upon their trading debut in slim volumes on Thursday, and attracted investors’ interests on Indonesia’s first ever initial public offering (IPO) by a startup.
The optimistic response to the IPO is believed to push other technology firms in Southeast Asia’s biggest economy to do what Kioson has done and list in the domestic stock market.
Kioson managed to raise 45 billion rupiah, equivalent to $3.3 million, by selling 150 million of its shares at 300 rupiah each. According to reports, the offering was more than 10 times over-subscribed.
The firm’s stock witnessed a 50 percent surge on its debut. However, the volumes were quite slim with more than 10,000 shares traded.
Jasin Halim, who is Kioson’s chief executive officer, said that the company has previously received offers from venture capital firms and private equity funds. The Indonesian firm chose to have an IPO due to the difference in valuation.
“The path that startups take is normally to look for venture capital, angel investors and so on…We feel that by taking the IPO route, that’s the method that is the most fair and transparent. Let the market value our company,” Halim said.
According to Halim, the company also offers investors to participate in the capital market while benefitting from the “hyper-growth” of startups.
The operation of Kioson runs an “online to offline” business model. This allows customers to buy thing online and pick their orders up at kiosks, locally known as “warungs”, all over the country. Kioson has already tied up with 19,000 kiosks. It is planning to raise that figure up to 100,000 by 2019.
The proceeds the company got from the initial public offering will be used primarily to acquire online vouchers coming from PT Narindo Solusi Komunikasi.
The startup field in Indonesia is now booming as investors are pulled in by the mostly young demographic of the country populated by 250 million people, who are showing stronger purchases and buying anything from a wide range of products.
The country’s president, Joko Widodo, has also pledged to increase broadband access in the nation.
More startups are also anticipated to take the IPO route as a result of the Kioson success, and to get better valuations from local investors familiar with their products.
“With products that are offered in Indonesia, it’s easier to build a positive perception in Indonesia than to introduce it in other countries,” said Andi Boediman, who is the co-founder of venture capital firm Ideosource.
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